OK3Sst 


IN  THE 

SUPREME  COURT 

OF  OHIO. 

DECEMBER  TERM,  1868. 


THE  STATE  OF  OHIO,  ON  THE  RELATION 
OF  THE  ATTORNEY  GENERAL 

against 

THE  CINCINNATI  GAS  LIGHT  AND  COKE 

COMPANY. 


E.  A..  FERGUSON’S  ARGUMENT 

FOR 

The  Defendant . 


ROBERT  CLARKE  &  CO.,  PRINTERS,  65  WEST  FOURTH  ST.,CIN.,  0. 


1869. 


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3d?.l 

0 1 32  d 


Robert  Clarke  £jf  Co.,  Printers ,  65  JVest  Fourth  Street ,  Cincinnati ,  0. 


IN  THE 


Jmpreme  @onrt  of  @fjio, 


DECEMBER  TERM,  1868. 


THE  STATE  OF  OHIO,  ex  rel.  ■ 
The  Attorney  General, 

against 

THE  CINCINNATI  GAS  LIGHT 
AND  COKE  COMPANY. 


Information  in  the 
nature  of  a 
Hfuo  Warranto. 


STATEMENT  OF  PLEADINGS. 


THE  information  filed  at  the  December  Term,  1867,  charges 
that  the  defendant,  without  any  warrant,  usurps  the  following 
franchises  : 

1.  That  of  being  a  body  corporate. 

2.  That  of  having  and  exercising  an  exclusive  right  to  open  and 
use  the  streets  of  the  city  of  Cincinnati  for  the  introduction  of 
pipes  for  conveying  gas  to  the  city  and  citizens  thereof. 


2 


Supreme  Court  of  Ohio. 


The  State  of  Ohio  w  The  Cincinnati  Gas  Light  and  Coke  Company. 

3.  That  of  conveying  gas  through  said  pipes,  and  supplying  the 
same  to  the  city  and  citizens,  and  charging  therefor  at  the  rate  of 
$2.50  for  each  thousand  cubic  feet  to  each  consumer  of  the 
same. 

The  pleadings,  so  far  as  it  is  necessary  to  state  them,  in  order  to 
understand  the  following  argument,  were  as  follows  : 

The  first  plea  of  the  defendant  states  that,  by  an  act  of  the  General 
Assembly  of  Ohio,  passed  April  3,  1837,  certain  persons  therein 
named  and  their  associates  were  thereby  created  a  body  corporate 
and  politic,  with  perpetual  succession,  by  the  name  and  style  of  “The 
Cincinnati  Gas  Light  and  Coke  Company,”  with  full  power  and 
authority  to  manufacture  and  sell  gas  to  be  used  for  the  purpose  of 
lighting  the  city  of  Cincinnati,  or  the  streets  thereof,  or  the  houses 
therein  contained  ;  to  erect  works  and  apparatus,  and  lay  pipes  for 
the  purpose  of  conducting  the  gas  in  the  streets  of  said  city  ;  but 
before  digging  up  the  said  streets,  the  consent  of  the  Council  of  said 
city,  for  that  purpose,  was  to  be  obtained. 

That,  on  the  16th  day  of  June,  1841,  the  said  city  made  a  con¬ 
tract  with  James  F.  Conover,  granting  to  him,  his  associates,  their 
heirs,  assigns  and  successors,  the  full  and  exclusive  privilege  of  using 
the  streets  of  the  said  city  for  the  purpose  of  conveying  gas  to  the  city 
and  citizens  thereof,  for  the  term  of  twenty-five  years  from  the 
date  of  the  contract,  and  thereafter  until  the  same  should  be 
purchased  by  the  city  as  therein  provided,  and  also  granting  the  full 
and  exclusive  power  and  authority  to  open  and  use  said  streets  for 
the  introduction  of  pipes  for  gas.  That  in  the  consideration  of 
the  said  privileges,  said  Conover,  for  himself,  etc.,  agreed  to  furnish 
to  the  said  city  on  the  streets  where  pipes  should  be  laid  for 
supplying  citizens  with  gas,  such  quantities  of  gas  as  might  be 
required  by  the  City  Council  for  public  lamps,  at  two-thirds  of  the 
lowest  average  price  at  which  gas  should  or  might  be  furnished  to 
private  individuals,  in  the  cities  of  New  Orleans,  Baltimore,  New 


December  Term,  1868. 

The  State  of  Ohio  The  Cincinnati  Gas  Light  and  Coke  Company. 


8 


York,  Louisville  and  Pittsburg  ;  and  for  the  like  price  to  provide  gas 
for  lamps  at  the  engine  houses  or  other  public  buildings  or  bridges 
belonging  to  the  city.  That  said  Conover,  etc.,  should  have  laid 
within  two  years  six  thousand  feet  of  leading  pipe  for  gas,  and 
should  annually  lay  four  thousand  feet  more  until  the  principal 
parts  of  the  city  should  be  furnished  with  pipes  ;  and  that  after  the 
expiration  of  the  said  twenty-five  years,  the  said  City  Council  should 
have  the  right  and  privilege  of  purchasing  the  works  at  a  fair  price 
and  compensation,  which  should  be  ascertained  and  determined  by 
five  disinterested  persons,  two  to  be  selected  by  the  City  Council, 
two  by  Conover  or  his  assigns,  and  the  fifth  by  the  four  thus 
selected.  That  after  this  contract,  Conover  associated  with  him¬ 
self  James  H.  Caldwell,  and  assigned  one-half  of  his  rights  and 
privileges  to  him.  That  afterward,  on  the  fifth  day  of  September, 
1842,  Conover  and  Caldwell  assigned  the  contract,  and  all  the 
privileges  of  lighting  said  city,  and  using  the  streets  thereof  for 
the  purpose  mentioned  in  the  contract  to  the  defendant  so  incorporated 
as  aforesaid ,  which  was  consented  to  by  the  said  City  Council 
on  the  14th  of  September,  1842,  by  a  resolution  passed  for 
that  purpose,  subject,  however,  to  the  terms  and  conditions  in 
the  contract  specified,  from  which  time  the  defendant  had  in 
all  respects  done  and  performed  the  things  which  were  required 
to  be  done  and  performed  under  it  by  said  Conover. 

The  second  plea  is  the  same  as  the  first,  with  the  additional 
averment  that,  by  virtue  of  the  charter,  the  contract  and  the 
law  of  the  land,  the  defendant,  cc  for  all  the  time  in  said  infor¬ 
mation  in  that  behalf  mentioned,  and  for  twenty  years  continuously 
prior  to  the  filing  of  the  same ,  have  used  and  exercised  the  liberties, 
privileges  and  franchises,”  as  stated  in  the  first  plea. 

The  plaintiff  filed  three  replications  to  the  first  and  second 
pleas.  The  first  is,  that  “  neither  the  Cincinnati  Gas  Light  and 
Coke  Company  nor  the  persons  acting  under  such  name  and 
style,  are  the  persons  named  in  said  act  of  the  General  Assembly, 


4 


Supreme  Court  of  Ohio. 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

nor  their  associates,  nor  the  successors  of  such  persons,  or  of 
their  associates,”  with  a  conclusion  to  the  country. 

To  this  replication  there  was  a  general  demurrer  by  the  defend¬ 
ant,  on  the  ground  that  it  is  a  departure  in  pleading.  The  second 
replication  was,  that  the  defendant  during  the  time  mentioned 
in  the  information,  nor  at  any  time,  did  not  have  or  exercise  an 
exclusive  right  to  open  and  use  the  streets  for  conveying  gas  to  the 
said  city  and  citizens  thereof,  as  alleged  in  said  pleas,  or  otherwise, 
with  a  conclusion  to  the  country. 

To  this  replication  there  was  a  special  demrurer,  because  it  does 
not  aver  that  any  person  or  corporation  other  than  this  defendant 
did,  during  the  time  mentioned  in  the  information,  have  or  exercise 
any  right  to  open  and  use  the  streets,  &c. 

The  third  replication  was  as  follows  ; 

“  And  the  said  William  H.  West,  Attorney  General,  for  a 
further  replication  in  this  behalf,  saith  that  true  it  is  that  the 
Cincinnati  Gas  Light  and  Coke  Company  did  charge  as  the  price 
of  gas  supplied  and  furnished  to  the  citizens  of  said  city  of  Cincin¬ 
nati  at  the  rate  of  two  dollars  and  fifty  cents  for  every  thousand 
cubic  feet  thereof,  as  alleged  in  said  pleas,  but  the  said  Attorney 
General  further  saith  that  the  said  General  Assembly,  by  an  act 
passed  on  the  5th  day  of  April,  1854,  provided  “That  after  the 
passage  of  this  act,  it  shall  be  lawful  for  the  City  Council  of  any 
city  in  which  a  gas  company  has  been  or  may  be  hereafter  estab¬ 
lished,  to  fix  from  time  to  time,  by  ordinance,  the  minimum  price 
at  which  such  council  shall  require  such  company  to  furnish  gas  to 
the  citizens  or  public  buildings  of  such  city,  or  for  the  purpose  of 
lighting  the  alleys  and  public  grounds  thereof,  for  any  period  not 
exceeding  ten  years  ;  and  from  and  after  the  assent  of  said  company 
to  such  ordinance,  by  a  written  acceptance  thereof  \  filed  in  the  Clerk’s 
office  of  such  city,  it  shall  not  be  lawful  for  said  City  Council 
to  require  the  said  company  to  furnish  gas  to  the  citizens,  public 
buildings,  public  grounds,  or  public  lamps  of  such  city  at  a  less 


December  Term ,  1868. 


5 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

price  during  the  period  agreed  on,  not  exceeding  ten  years  as 
aforesaid  :  provided  that  this  act  shall  not  operate  to  impair  or 
affect  any  contract  hereafter  made  between  any  city  and  gas  light, 
or  gas  light  and  coke  company.”  And  that  the  City  Council  of 
the  city  of  Cincinnati,  on  the  16th  day  of  August,  1867,  by  an 
ordinance,  duly  passed,  provided,  “  That  for  the  period  of  one  year 
from  and  after  the  first  day  of  September,  a.  d.  1867,  the  Cincin¬ 
nati  Gas  Light  and  Coke  Company  shall  furnish  gas  of  the  standard 
quality  to  the  public  buildings  of  the  city  of  Cincinnati  and  to  citizens 
or  private  consumers  at  the  rate  of  two  dollars  for  each  one 
thousand  feet  so  furnished,  and  shall  not  charge  any  greater  sum 
than  that  herein  specified  ;  provided,  however,  nothing  herein  is 
to  be  so  construed  as  a  waiver  by  the  city  of  her  right  to  obtain 
possession  of  the  works  of  said  company,  as  provided  by  contract 
therewith.”  And  this  he  is  ready  to  verify,  and  therefore  prays 
judgment,  &c. 

To  this  replication  the  defendant  filed  four  rejoinders. 

The  second  was,  that  the  defendant  has  not  assented  to  or  accepted 
the  said  ordinance. 

The  fourth  was,  that  in  September,  1858,  the  prosecuting  attor¬ 
ney  of  Hamilton  county,  upon  the  relation  of  Samuel  M.  Hart, 
filed  an  information  in  the  nature  of  a  quo  warranto ,  in  the  name  of 
the  state  against  the  defendant,  in  the  District  Court  for  said  county, 
whereby  the  court  was  informed  of  the  corporate  organization  of  the 
defendant :  that  it  was  provided  in  its  charter  that  any  future  legis¬ 
lature  might  alter,  modify  or  repeal  the  same  ;  that  the  legislature, 
by  an  act  passed  March  nth,  1853,  so  altered  said  charter  that 
the  said  City  Council  was  empowered  to  regulate  by  ordinance  the 
price  which  the  defendant  might  charge  for  gas  furnished  to  the  citizens , 
public  buildings ,  and  streets  of  said  city,  and  that  if  it  charged  more 
it  should  forfeit  its  rights  under  said  charter.  That  in  pursuance 
of  said  act,  the  said  City  Council,  on  the  31st  of  August,  1853, 
passed  an  ordinance  by  which  the  price  for  gas  furnished  citizens 


6 


Supreme  Court  of  Ohio. 

The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 


and  public  buildings  was  fixed  at  $2.25  per  thousand  cubic  feet ; 
that  the  defendant  wholly  disregarded  the  requirements  of  said 
ordinance  and  exacted  $2.50  per  thousand  cubic  feet  from  said  citi¬ 
zens  and  other  consumers  of  gas;  wherefore  judgment  was  de¬ 
manded  that  the  defendant  be  excluded  from  all  corporate  rights 
and  be  dissolved.  That  in  October,  1858,  the  defendant  pleaded 
several  pleas,  the  first  of  which  was  in  substance  the  same  as  the 
first  in  this  case  pleaded,  setting  forth  the  charter,  the  contract  and 
its  assignment,  by  virtue  of  which,  it  was  claimed,  the  defendant 
became  invested  with  the  exclusive  privilege  of  lighting  the  city  of 
Cincinnati  with  gas,  and  of  furnishing  the  city  and  citizens  of  Cin¬ 
cinnati  with  gas  for  the  period  of  twenty-five  years  upon  the  terms 
set  forth  in  the  contract,  which  contract,  it  was  claimed,  could  not 
be  altered,  modified,  or  in  any  manner  changed,  by  any  legislation 
of  the  state  of  Ohio,  or  by  any  ordinance  of  the  city  of  Cin¬ 
cinnati.  That  in  May,  1859,  the  state  filed  its  demurrer  to  said 
plea,  because  the  same  was  not  sufficient  in  law  to  bar  the  state. 
That  at  the  May  term,  1859,  said  District  Court  judgment 
was  entered,  finding  said  plea  valid  in  law,  and  that  the  facts 
therein  set  forth  were  a  bar  to  the  relief  sought  by  the  plaintiff 
in  the  information,  and  dismissing  the  same.  And  the  defendant 
avers  in  said  fourth  rejoinder  that  said  judgment  was  in  full  force 
and  unreversed,  and  prays  judgment  whether  the  state  ought  to 
be  admitted  or  received  against  said  judgment  to  plead  the  third 
replication. 

To  all  of  the  rejoinders  there  was  a  general  demurrer  on  be¬ 
half  of  the  state. 

The  case  was  argued  orally  on  January  5th,  6th  and  7th? 
1869,  by  Messrs.  W.  Y.  Gholson  and  Stanley  Matthews  for 
the  Attorney  General,  and  Messrs.  Geo.  Hoadly  and  E.  A. 
Ferguson  for  the  defendant.  There  was  also  a  printed  argu¬ 
ment  by  A.  F.  Perry,  Esq.,  submitted  on  behalf  of  the  de¬ 
fendant. 


December  Term ,  1868. 


7 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 


ARGUMENT  OF  MR.  E.  A.  FERGUSON. 

May  it  Please  Your  Honors , 

After  the  elaborate  argument  of  our  learned  oppo¬ 
nent,  Judge  Gholson,  and  the  equally  elaborate  argument  by 
my  colleague,  Judge  Hoadly,  I  feel  that  I  would  be  trespass¬ 
ing  upon  the  patience  of  the  court,  and  taking  up  unneces¬ 
sary  time  if  I  attempted  to  go  into  the  preliminary  questions 
arising  upon  the  pleadings.  I  shall,  therefore,  may  it  please 
your  Honors,  pass  them  by,  and  come  to  what  are  the  main 
and  principal  questions  in  this  case ;  and  the  first  thing  in 
order  that  I  shall  take  up  and  discuss  is  the  nature  and  validity 
of  the  Conover  contract. 

The  Court,  in  considering  this  question,  will  take  the 
contract  as  they  find  it  upon  the  record.  In  the  course  of  my 
argument  I  shall  make  use  of  the  brief  presented  by  the  de¬ 
fendants.  It  contains  an  abstract  of  the  pleadings  which  your 
Honors  have  in  full. 

It  is,  as  stated  in  the  record,  “  that  on  the  16th  of  June, 
1841,  the  said  city  made  a  contract  with  James  F.  Conover, 
granting  to  him,  his  associates,  their  heirs,  assigns  and  succes¬ 
sors,  the  full  and  exclusive  privilege  of  using  the  streets  of  said 
city  for  the  purpose  of  conveying  gas  to  the  city  and  citizens 
thereof,  for  the  term  of  twenty-five  years  from  the  date  of  the 
contract,  and  thereafter ,  until  the  same  shall  be  purchased  by 
the  said  city,  as  therein  provided ;  and  also  granting  the  full 
and  exclusive  power  and  authority  to  open  and  use  the  streets 
for  the  purpose  of  conveying  gas.” 

Now  this  was  the  grant  made  to  Conover,  “  and  in  con¬ 
sideration  of  said  privilege,  the  said  Conover  agreed  to  furnish 
to  said  city,  where  pipes  should  be  laid  for  supplying  citizens 
with  gas,  such  quantities  of  gas  as  might  be  required  by  the  city 


8 


Supreme  Court  of  Ohio- 

The  State  of  Ohio  -v.  The  Cincinnati  Gas  Light  and  Coke  Company. 


for  public  lamps,  at  two-thirds  of  the  lowest  average  price  at 
which  gas  is  furnished  to  private  individuals  in  the  cities  of 
New  Orleans,  Baltimore,  New  York,  Louisville  and  Pittsburg, 
and  for  the  like  price  to  provide  gas  for  lamps  at  the  engine 
houses  or  other  public  buildings ,  or  bridges  belonging  to  the  city ; 
that  said  Conover  should  have  laid,  within  two  years  from  the 
date  of  the  contract,  6,000  feet  of  leading  pipe  for  gas,  and 
should  annually  lay  4,000  feet  of  leading  pipe  until  the  princi¬ 
pal  parts  of  the  city  were  furnished  with  pipes ;  and  that  after 
the  expiration  of  said  twenty-five  years,  the  said  city  council 
should  have  the  right  and  privilege  of  purchasing  from  the  said 
Conover,  his  associates,  their  heirs,  assigns  or  successors,  their 
pipes,  buildings,  fixtures,  and  other  apparatus,  at  a  fair  price  and 
compensation,  which  should  be  ascertained  by  five  disinterested 
persons,  two  of  whom  should  be  selected  by  the  city  council,  and 
two  by  the  said  Conover,  his  associates,  their  heirs,  assigns  or 
successors,  and  the  fifth  by  the  four  thus  selected.” 

There  is  no  question  in  this  case,  if  your  Honors  please, 
as  to  the  bona  fide  character  or  honesty  of  this  contract.  The 
first  question  that  arises  is,  were  the  parties  who  made  the  con¬ 
tract  competent  to  contract  ?  About  Mr.  Conover’s  ability,  of 
course  there  can  be  no  question,  he  being  a  natural  person. 
He,  likewise,  as  a  natural  individual,  had  power  to  erect  gas 
works  in  the  city  of  Cincinnati,  and  he  had  power  to  engage 
in  the  manufacture  of  gas  in  those  works.  And  what  was  it, 
now,  that  James  F.  Conover,  having  these  natural  powers,  and, 
we  will  suppose,  possessed  of  the  capital,  would  want  ?  It  is 
possible,  the  thing  being  portable,  to  carry  it  about,  just  as  any 
other  commodity  may  be  carried  in  vessels  adapted  to  the  pur¬ 
pose  ;  but  it  is  not  convenient  to  do  so.  It  is  doubtful  whether 
the  commodity  could  be  carried  about  and  be  so  cheap,  or 
furnished  at  such  a  price  as  to  bring  it  into  general  use.  We 
will  suppose,  therefore,  that  Conover  had  erected  his  works  ; 


December  Term,  1868. 


0 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

that  he  had  engaged  in  the  manufacture  of  gas ;  that  he  had 
the  commodity  to  sell.  Now,  what  would  he  want? 

If  he  only  sought  to  furnish  his  immediate  neighbors, 
if  he  desired  to  furnish  only  those  who  held  property  adjoin¬ 
ing  his,  by  agreeing  with  them  that  he  might  lay  mains  or 
pipes  through  their  premises,  that  object  could  be  accomplished. 
But  he  desired  to  furnish  other  citizens,  and  in  doing  so  he 
must  cross  the  streets  of  the  city  in  order  to  get  from  one 
square  to  another,  or  what  is  more  convenient,  he  might  desire 
to  go  along  the  streets  of  the  city — it  is,  after  all,  a  question 
of  convenience — and  he  would  seek  to  get  what? — the  privi¬ 
lege  of  doing  that,  of  laying  his  mains  either  upon  his  neigh¬ 
bor’s  property  or  upon  the  property  which  belongs  to  the  pub¬ 
lic,  as  I  shall  endeavor  to  show,  belongs  to  the  city  of  Cincin¬ 
nati  ;  but  whether  he  laid  mains  upon  the  property  of  his  neigh¬ 
bor  or  upon  the  property  of  the  city,  he  would  acquire  the 
same  interest  individually,  no  greater,  no  less. 

He  would  get  that  which  is  a  familiar  thing  in  the  law ; 
he  would  get  the  right  to  lay  his  pipes,  to  enter  and  to  repair 
them ;  he  would  get,  in  other  words,  an  easement.  That  is  all 
Conover  did.  It  is  a  property  right ;  and,  therefore,  when  he 
sought  to  bargain  with  the  city  of  Cincinnati,  he  sought  to 
acquire  a  property  interest.  They  gave  him,  his  heirs,  assigns 
and  successors  the  right  to  lay  mains.  If  it  had  been  confined 
to  individual  property  there  would  be  no  doubt  about  it.  Is 
there  any  difference  in  law  because  it  concerns  corporate  prop¬ 
erty  ?  Conover  had  the  right,  not  only  to  erect  works,  but  he 
had  the  right,  likewise,  to  acquire  an  easement.  All  that  he 
would  acquire  was  an  easement  when  his  mains  were  put  in. 

Let  us  look  at  the  other  party,  the  city  of  Cincinnati, 
and  at  its  property  interest;  let  us  see  how  it  stands  in  law,  to 
see  whether  it  had  the  property  to  grant  to  him,  or  the  use 
of  the  property  to  grant  to  him  for  the  purpose  for  which  he 


10 


Supreme  Court  of  Ohio. 

The  State  of  Ohio  •v.  The  Cincinnati  Gas  Light  and  Coke  Company. 


wanted  it.  I  take  it,  may  it  please  your  Honors,  that  the  city 
of  Cincinnati  had,  as  a  city  under  its  charter,  under  the  rights 
which  it  had  accorded  to  it,  the  same  as  all  other  similar 
municipalities  in  the  state,  a  property  interest  in  the  streets  of 
Cincinnati ;  different  from  the  interest  which  the  public  has  of 
transit,  the  privilege  of  walking,  riding  and  driving  on  the 
highway,  a  greater  and  a  different  interest.  This  is  settled 
law  in  the  state  of  Ohio,  adjudicated  by  this  court  as  far  back 
as  the  Seventh  Ohio  Reports  in  the  case  of  Le  Clerque  against 
the  town  of  Gallipolis,  and  as  I  shall  endeavor  to  show  your 
Honors,  in  a  case  presenting  the  question  as  fairly  as  any  case 
could  present  it,  decided  by  Judge  Grholson  when  on  the 
Superior  Bench,  recognized  as  law  to  this  day.  But,  before  I 
cite  any  case,  allow  me  to  call  your  Honors’  attention  to  a  pro¬ 
vision  of  the  charter  of  the  city  of  Cincinnati,  to  see  what  this 
individual  corporate  body  was  at  that  time ;  for  I  say  that  it 
had  as  large  powers  as  any  municipality  existing  in  the  land, 
expressly  given  to  it  by  the  terms  of  the  charter  of  1834. 

The  first  section,  after  defining  the  boundaries  and 
incorporating  the  inhabitants  of  the  city,  reciting  the  usual 
powers  of  suing  and  being  sued,  and  having  a  corporate  seal, 
declares  it  shall  be  competent  to  have  and  enjoy  all  the  rights 
and  immunities,  powers  and  privileges,  and  be  subject  to  all 
the  duties  and  obligations  incumbent  upon  and  appertaining  to 
a  municipal  corporation,  and  for  the  better  ordering  and  gov¬ 
erning  of  the  city,  it  goes  on  to  appoint  certain  officers ;  there 
is  a  grant  of  municipal  power  unrestricted,  and  all  that  follows 
in  the  subsequent  portions  of  this  charter  are  either  enlarge¬ 
ments  of  this  grant,  by  way  of  giving  it  powers,  not  only  of 
general  taxation,  but  of  special  taxation,  or  restriction  upon  the 
powers  that  are  thus  given.  The  next  section,  if  your  Honors 
please,  declares  that  the  said  city  of  Cincinnati  shall  be  invested 
with  the  real  and  personal  property,  and  all  the  rights  and 


December  Term,  1868. 


11 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

privileges,  etc.,  belonging  to  or  vested  in  the  city  of  Cincin¬ 
nati  before  that  time. 

It  has  all  the  real  property,  and  it  has  all  the  privileges 
and  rights  in  the  city  of  Cincinnati,  as  in  the  case  of  the  town 
of  Gallipolis,  no  matter  where  the  fee  is.  Although  the  public 
square  of  that  place  was  set  apart  and  dedicated  before  the 
existence  of  the  town,  nevertheless,  the  court  held  that  no  mat¬ 
ter  where  the  fee  was — whether  in  state,  county  or  town — the 
use  of  that  property  was  in  the  inhabitants  of  Gallipolis,  and 
that  use  could  not  be  interfered  with  by  the  legislature ;  it  was 
the  private  estate  of  the  town. 

Again,  if  your  Honors  please,  in  the  case  of  the  city  of 
Cincinnati  against  Evans  (5th  Ohio  State  Reports,  page  549), 
it  was  decided  that  the  property  which  the  city  of  Cincinnati 
has  in  the  streets  of  the  city,  can  be  lost  by  lapse  of  time.  An 
individual  may  get  it  by  taking  possession  and  holding  it 
adversely  to  the  city  for  twenty  years,  precisely  as  individual 
property  may  be  lost  and  acquired.  It  was  the  very  question 
that  was  made,  I  recollect,  at  the  time  the  suit  was  brought  by 
Platt  Evans. 

I  was  the  City  Solicitor,  and  drew  the  plea  setting  up 
that  the  place  where  he  complained  that  the  injury  was  done 
was  a  public  highway;  that  his  building  projected  into  the 
street,  the  front  of  which  was  taken  oft*,  and  that  what  the  city 
did  was  to  abate  a  nuisance.  My  successor  took  the  same 
ground  when  the  case  came  to  this  court,  and  it  was  settled 
that  that  property  was  like  any  other  property  of  the  city  ; 
that  by  lapse  of  time,  and  by  his  possession,  the  city  had  lost 
the  right  to  it,  was  a  trespasser,  and  was  compelled  to  pay 
damages  to  the  plaintiff  in  the  case,  Platt  Evans. 

The  case  to  which  I  refer,  which  Judge  Gholson 
decided,  is  a  similar  case,  and  is  given  in  Disney’s  Reports. 
I  have  not  the  book  here,  but  can  state  what  it  was.  Your 


12 


Supreme  Court  of  Ohio. 

The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 


Honors,  however,  will  recollect  that,  in  the  case  of  Dr.  Migh- 
els  vs.  the  Commissioners  of  Hamilton  county  (7th  0.  State 
Reps.),  it  was  decided  that  the  Commissioners  of  Hamilton 
county,  in  erecting  a  court  house  and  jail,  were  not  a  corpora¬ 
tion  ;  that  they  were  not  liable  to  respond  in  damages  to  Dr. 
Mighels — although,  on  account  of  alleged  neglect  of  the  com¬ 
missioners,  he  had  fallen  and  fractured  his  thigh,  and  had 
recovered  upward  of  $7000  damages  in  the  Superior  Court  of 
Cincinnati — upon  the  ground  that  they  were  the  agents  of  the 
state,  and  doing  the  business  of  the  state  in  providing  the 
court  house  and  jail. 

How  in  the  erection  of  the  court  house  and  jail  it  became 
necessary  or  convenient  to  take  possession  of  two  of  the  streets 
of  Cincinnati.  The  body  of  the  jail  is  built  on  a  portion  of 
one  of  them.  In  this  street  the  city  had  a  sewer,  situated 
south  of  the  present  court  house.  The  county  commission¬ 
ers,  on  taking  possession,  were  about  to  take  up  the  pavement, 
to  inclose  the  ground,  and  they  had  made  no  provision  for  the 
water  which  had  been  accustomed  to  flow  upon  that  street, 
Before  doing  so,  however,  they  had,  under  the  statute  provid¬ 
ing  for  the  vacation  of  streets,  applied  to  the  Court  of  Common 
Pleas  and  had  given  due  notice,  as  your  Honors  will  find  upon 
the  facts  recited  in  the  case,  had  done  every  thing  that  the 
statute  required,  and  had  the  judgment  of  the  Court,  ordering 
the  vacation  of  the  streets — such  a  judgment  as  Judge  G-holson 
held  barred  every  one  of  the  adjacent  proprietors,  but,  as  he 
held  also,  in  that  case,  although  that  judgment  was  conclusive 
upon  them,  the  city  had  certain  property  interests,  which  were 
not  within  the  purview  of  the  statutes,  different  from  the 
interests  of  the  lot  owners  adjacent  to  the  court  house  in  hav¬ 
ing  the  right  to  pass  and  repass  over  the  ground  occupied  by 
the  street ;  that  it  had  built  a  pavement  there,  had  a  water 
way  there,  and  had  other  interests  in  the  street ;  that  it  had  a 


December  Term,  1868. 


13 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

two-fold  character  in  regard  to  the  public  streets,  in  one  of  which 
the  general  public  interest  is  represented,  in  the  other  a  corpo¬ 
rate,  or  individual  interest ;  that  although  the  commissioners, 
as  the  agent  of  the  state,  had  a  duty  imposed  upon  them  of 
providing  a  court  house  and  jail,  and  were  here  seeking  to  use 
the  street  for  the  public,  nevertheless  in  carrying  out  that 
duty  neither  the  county  nor  the  state  could  take  this  property 
without  making  compensation.  And  he  enjoined  the  commis¬ 
sioners  of  Hamilton  county  from  proceeding  with  their  work 
until  they  made  some  arrangement  by  which  the  water  which 
had  been  accustomed  to  flow  in  that  street  was  provided  for. 

Carrying  out  the  same  doctrine,  may  it  please  your  Hon¬ 
ors,  is  the  case  of  Clark  v.  Fry ,  8th  O.  S.  Rep.,  p.  594,  where  it  is 
said  in  addition  to  the  right  of  transit  which  the  public  has,  and 
in  addition  to  that  which  the  city  has,  the  property  owner  like¬ 
wise  has  the  right  to  build  sewers  and  drains,  or  to  set  up  a 
fence  while  building  his  house,  and  that  it  was  no  nuisance 
on  his  part  to  enter  upon  the  highway  and  dig  and  occupy 
for  these  purposes.  I  say,  then,  that  the  city  of  Cincinnati  had 
this  property  interest  in  the  streets  of  Cincinnati,  that  it  had 
the  right  to  use  them  for  all  purposes,  to  promote  the  health, 
safety  and  convenience  of  its  citizens.  It  is  incidental  to  the 
highway,  and  the  property  use  is  in  the  city.  There  is  no 
instance,  I  venture  to  say,  if  you  look  through  the  statute 
books  from  one  end  to  the  other,  where  the  state  of  Ohio  has 
ever  attempted  to  violate  this  right;  on  the  contrary,  in  every 
instance,  whenever  it  is  proposed  to  do  anything  in  the  highway, 
it  sends  the  party  desiring  to  get  the  right  to  the  municipality. 
Then  if  Conover  had  said  to  the  city  council  that  he  had 
erected  gas  works,  that  this  was  a  new  and  useful  mode  of 
lighting  the  city,  and  that  he  desired  to  lay  his  pipes  in  the 
streets,  and  to  get  that  easement  of  those  who  were  the  owners 
of  it,  they  had  the  power  to  grant  it.  Now,  if  your  Honors 


U 


Supreme  Court  of  Ohio. 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

please,  for  the  very  same  reason  they  had  a  right  to  exact  a 
consideration  for  that  grant,  and  in  this  contract  they  did  exact 
a  consideration.  What  was  it?  They  said  to  him :  We  will 
give  you  the  exclusive  privilege  to  do  this  thing :  we  will  grant 
it  to  no  one  else,  upon  certain  conditions.  We  have  public 
interests  to  subserve.  Lighting  the  streets  by  night  will 
lessen  the  number  of  policemen  that  it  will  be  necessary  to 
keep  to  protect  the  citizens.  If  a  street  is  being  graded,  or  a 
sewer  is  being  built,  and  the  city  is  well  lighted,  less  care  will 
be  needed  to  guard  them,  fewer  watchmen  will  be  required  to 
keep  persons  passing  on  the  highway  from  falling  into  the  pits 
that  may  be  dug  for  these  purposes.  So  that  the  municipality, 
having  these  duties  and  consequent  liabilities — without  going 
into  the  act  of  1839 — the  city  council  had  the  right,  for  a  con¬ 
sideration,  to  exact  what  they  did,  so  far  as  furnishing  the  city 
with  gas  was  concerned. 

And  right  here  I  desire  to  correct  what  I  think  is  an 
error  on  the  part  of  the  counsel  who  formerly  gave  an  opinion 
to  the  city  council  of  Cincinnati  on  this  subject.  In  the 
twenty-fifth  section  there  is  a  provision  that  the  city  council 
of  Cincinnati,  in  expending  its  funds,  shall  not  make  any  con¬ 
tract  involving  an  outlay  of  money  beyond  the  current  year. 
This  contract  involved  nothing  of  the  kind.  They  said  to 
Conover:  We  will  give  }mu  this  consideration — the  exclusive 
easement  in  these  streets — provided  you  will  agree  to  furnish 
us  with  such  quantities  of  gas  as  we  may  need  for  our  munici¬ 
pal  purposes.  It  was  a  contract  by  which  they  could  obtain 
gas,  and  they  could  take  it  or  not,  as  the  interests  of  the  city 
required,  because  they  paid  him  the  consideration  by  which 
he  bound  himself  to  furnish  them,  from  time  to  time,  with 
such  quantities  of  gas  as  they  should  require.  It  is  not  the  case, 
as  the  learned  counsel  on  the  other  side  seemed  to  think,  that 
the  city  was  bound  to  take  the  gas,  or  that  Conover  was  not 


December  Term ,  1868. 


15 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

bound  to  supply  it  unless  they  were  bound  to  take  it.  The 
contract  on  their  part  was  an  executed  contract — they  paid  the 
consideration,  and  they  had  to  that  extent  the  right  to  make  it. 

I  will  come,  after  a  while,  to  the  purchase  of  the  works, 
and  where  they  got  that  power.  In  the  case  that  was  cited  by 
Judge  Gholson  (in  25  Conn.),  is  a  case  referred  to  of  the  At¬ 
torney  General  against  the  Sheffield  Gas  Company  (in  19th 
Eng.  Law  and  Equity  Reps.,  p.  639),  and  to  this  case  I  invite 
the  careful  attention  of  the  Court.  The  case  originated  before 
Vice  Chancellor  George  J.  Turner.  This  case  was  as  follows : 

In  1818  there  had  been,  in  the  city  of  Sheffield,  a  gas 
company  incorporated  by  act  of  Parliament.  Subsequently 
there  was  another  gas  company  incorporated,  and,  by  another 
act  of  Parliament,  this  company  amalgamated  with  the  former 
one,  the  two  thus  becoming  one  company.  Now  the  citizens 
of  Sheffield  felt  as  though  they  had  come  under  a  monopoly, 
so  it  is  said  in  the  report.  A  public  meeting  was  called  in 
Sheffield,  and  they  proposed  to  get  up  a  new  joint  stock  com¬ 
pany,  to  be  called  the  Sheffield  Gas  Consumers  Company. 
Some  two  thousand  subscribers  were  obtained,  owning  ten 
thousand  shares,  making  a  capital  of  £50,000,  being  £5  per 
share.  This  new  company  was  about  to  enter  upon  the  streets 
of  Sheffield  to  dig  them  up  for  the  purpose  of  laying  pipes,  but 
before  doing  so  they  had  gone  to  the  Board  of  Highways  and 
had  obtained  permission  to  do  so.  The  old  company  then 
filed  a  bill  in  chancery,  and  it  came  on  before  Vice  Chancellor 
Turner.  In  his  opinion,  which  will  be  found  in  a  note  on  page 
641,  he  speaks  of  the  right  of  this  plaintiff*  as  being  an  ease¬ 
ment,  that  is  what  the  old  company,  the  plaintiffs,  had  in  the 
streets  of  Sheffield,  and  they  were  claiming  that  there  would 
be  an  injury  to  their  easement  by  the  other  company  digging 
up  the  streets  from  time  to  time  as  they  would  do.  As  it 
appears  from  the  subsequent  report,  before  they  got  through 


16 


Supreme  Court  of  Ohio . 

The  State  of  Ohio  •v.  The  Cincinnati  Gas  Light  and  Coke  Company. 


with  the  litigation  the  defendants  had  laid  about  seventy 
miles  of  pipes,  and  they  proposed  to  lay  about  one  hundred — 
more  extensive  even  than  our  Cincinnati  works,  which  have 
about  ninety  miles — but  the  Judge  speaks  of  the  plaintiffs  as 
having  an  easement,  and  he  refuses  to  interfere  by  injunction, 
but  suggested  in  the  same  connection  that  possibly  it  might 
make  a  difference  if  the  Attorney  General  were  joined  with  the 
plaintiffs  and  should  file  an  information.  Thereupon  the  At¬ 
torney  General  was  applied  to  and  filed  an  information  against 
the  new  company  in  Chancery,  joined  as  a  plaintiff*,  and  ap¬ 
plied  for  an  injunction  upon  the  ground  that  this  thing  was  a 
public  nuisance,  and  it  was  his  business  as  Attorney  General 
to  prevent  that.  The  case  then  came  on  before  the  Lords 
Justice  Turner  and  Knight  Bruce.  They  disagreed  in  opin¬ 
ion,  but  both  of  them  treated  the  plaintiff’s  property  as  an 
easement,  and  they  called  in  the  Lord  Chancellor  Cranworth, 
making  a  full  court,  as  they  say  in  England.  The  Court 
refused,  by  decree,  the  injunction,  and  permitted  the  new  com¬ 
pany  to  go  on  and  lay  their  mains,  upon  the  ground  that  it 
was  not  a  nuisance,  or  not  such  an  interruption  with  the  use  of 
the  streets  as  amounted  to  a  nuisance,  and  that  they  would  not? 
therefore,  interfere  by  an  injunction.  I  might  say  in  this  instance 
that  the  plaintiff  company  had  the  right  to  enter  upon  and  dig 
up  the  streets,  but  the  defendant  had  no  such  right.  They  had 
nothing  except  what  they  got  through  the  board  of  supervi¬ 
sors  of  highways.  It  was  said,  by  the  Lord  Chancellor,  in 
giving  his  opinion,  after  saying  that  Parliament  had  authorized 
this  stock  company :  “  Did  the  Court  think  that  they  might 
go  and. violate  the  law  by  tearing  up  the  pavement?  I  have 
two  theories  on  the  subject,  either  of  which  is  satisfactory. 
Perhaps  the  legislature  thought  they  would  get  the  consent  of 
the  board  of  highways  to  use  the  streets  through  which  the 
pipes  would  be  laid,  and  that  it  might  safely  be  left  to  them 


December  Term ,  1868. 

The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 


17 


or,  that  the  legislature  did  not  consider  the  taking  up  of  the 
pavement  for  such  a  legitimate  purpose  as  this,  a  nuisance  at 
all.”  There  is  a  similar  case  as  to  what  interest  the  company 
had,  in  2  Rhode  Island  Rep.,  p.  15.  In  that  case  the  Provi¬ 
dence  Gas  Company  had  a  charter  similar  to  the  gas  company 
in  this  case:  “The  said  company  having  power  and  authority 
to  open  the  ground  in  any  part  of  the  streets  or  alleys  for  the 
purpose  of  laying  pipes  for  conducting  gas.”  The  question  in 
this  case  was  whether  these  pipes  were  personal  chattels,  or 
whether  the  property  was  real  estate  or  an  easement ;  and  the 
court  decided  it  was  real  estate,  that  it  was  taxable  as  such, 
that  they  had  an  easement,  that  it  is  real  property,  and  not 
chattel  property,  therefore  taxable  as  real  property,  and  it  was 
so  taxed  under  this  decision. 

How,  may  it  please  your  Honors,  whatever  James  F. 
Conover  got,  or  whatever  the  gas  company  got,  it  was  a  prop¬ 
erty  interest,  as  I  have  already  said.  In  the  case  of  Conover 
he  derived  it  from  the  owner,  the  one  that  had  the  right  to 
make  the  grant,  the  one  in  whom  was  invested  the  property 
interest. 

Let  us  for  a  moment  consider  the  qther  question.  It  is 
not  only  provided  in  this  contract  that  they  shall  furnish  the 
city  with  such  quantity  of  gas  as  may  be  required  for  the 
public  lamps  and  the  public  buildings  of  the  city,  but  it  is  also 
agreed,  upon  the  part  of  Conover,  that  he  would  lay  so  many 
feet  of  pipe  every  year,  and  that,  after  twenty-five  years,  he 
would  sell  his  works  and  his  interest  under  this  contract  to  the 
city,  at  an  appraisement  to  be  made  by  disinterested  persons, 
as  therein  provided.  It  was  a  continuing  right  on  the  part  of 
the  city,  ^fter  the  twenty-five  years. 

Judge  Gholson — You  are  mistaken  in  supposing  that 
any  part  of  fhe  contract  provided  for  the  lighting  of  the  public 
buildings. 


18 


Supreme  Court  of  Ohio. 

The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 


Mr.  Ferguson — I  certainly  am  not  mistaken  in  what  is 
upon  the  record.  We  will  see.  In  the  contract  made  with 
Conover  16th  of  June,  1841,  the  record  says : 

“In  consideration  of  the  privileges  thereby  granted,  the 
said  Conover,  &c.,  agreed  to  furnish  to  the  said  city  such  quan¬ 
tity  of  gas  as  might  be  required  by  the  said  city  council,  for 
public  lamps,  at  two-thirds  of  the  lowest  average  price  at 
which  gas  should  or  might  be  furnished  to  private  individuals 
in  the  cities  of  Hew  Orleans,  Baltimore,  Hew  York,  Louisville 
and  Pittsburg,  &c. ;  and  for  the  like  price  to  furnish  gas  to  the 
engine  houses  or  other  public  buildings  belonging  to  said 
city.” 

It  is  so  also  in  the  plea  and  in  the  abstract.  In  addition 
to  that  he  agreed  that  after  a  certain  time  he  would  give  up 
his  works  and  his  privileges  to  the  city  for  a  compensation. 
Were  it  not  for  the  act  of  1839  there  might  be  some  question 
as  to  whether  the  city  was  bound  by  that  contract  to  buy  the 
works  after  it  had  made  the  election  to  do  so.  Suppose  it  had 
been  that  he  was  to  give  them  up  absolutely,  and  that  they 
were  bound  to  take  them  at  the  end  of  the  twenty -five  years  ; 
without  the  act  of  1839  there  might  be  some  question  whether 
he  could  compel  the  city  to  take  them  then.  But  the  act  of 
1839  gives  the  power  to  make  this  portion  of  the  contract  the 
general  municipal  power,  enabling  the  city  to  provide  for  the 
lighting  of  public  buildings,  whenever  the  city  council,  as  a  gov¬ 
erning  body,  thought  fit  to  do  so.  As  to  that  which  was  cited 
by  Judge  Hoadly  from  the  fourteenth  section,  authorizing  the 
city  to  put  taxes  upon  the  adjoining  property,  if  the  Court 
reads  that  section  through  they  will  find  that  it  gives  power  to 
levy  taxes  upon  all  species  of  property  for  general  purposes, 
including  paying  damages  that  might  be  incurred  by  insuffi¬ 
cient  lighting.  They  had  the  power  of  taxation,  and  a  special 
power  of  taxation  is  given,  namely,  for  paving  or  lighting  the 


December  Term,  1868 . 


19 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

streets ;  but  there  is  no  restriction  upon  the  city  council  from 
performing  municipal  duties,  except  that  they  shall  not  make 
any  contract  requiring  an  outlay  of  money  beyond  the  current 
year.  The  special  taxing  power  upon  abutting  property  is  for 
raising  additional  revenue  to  be  expended  for  particular  pur¬ 
poses.  If  the  city  of  Cincinnati,  under  the  general  contracting 
power,  entered  into  a  contract  with  a  man  to  pave  a  street, 
and  to  give  him  an  assessment  in  payment,  why,  as  the  con¬ 
tract  is  construed  by  the  courts  of  this  state,  if  it  failed  to  give 
him  a  valid  legal  assessment,  it  must  pay  him  out  of  the  gen¬ 
eral  funds.  Judge  Gholson  and  myself  know  that,  as  we  have 
had  this  doctrine,  while  solicitors  for  the  city,  enforced  upon 
us  again  and  again.  We  generally  defended  these  cases  upon 
their  merits,  for  there  is  no  doubt  about  the  doctrine.  So  that 
this  special  taxing  power,  in  aid  of  the  general  revenues  of  the 
city,  does  not  prevent  the  city  from  paying  money  out  of  the 
general  fund  for  lighting  the  public  buildings,  or  for  any  other 
municipal  duty  it  may  think  fit  to  perform. 

Looking  at  this  thing  in  chronological  order,  we  find 
upon  the  statutes  that  the  Cincinnati  Gas  Light  and  Coke  Com¬ 
pany  was  incorporated  in  1837,  but  we  know  that  the  city  of 
Cincinnati  was  not  lighted  with  gas  under  that  charter.  By 
the  act  of  1839,  the  city  of  Cincinnati  became  incorporated  as 
a  gas  company,  with  power  to  levy  a  special  assessment  on  the 
parts  of  the  city  that  might  be  lighted  with  gas — that  is,  it  en¬ 
larged  the  power  of  taxation  in  this  way  :  that,  whereas,  by 
the  charter  of  1834,  it  could  be  done  only  upon  the  petition  of 
the  owners  of  the  abutting  property,  it  could  be  done  now 
without  petition.  Beside,  the  general  power  was  given  to  cause 
the  city  to  be  lighted,  and  to  provide  the  means  the  city  coun¬ 
cil  was  authorized  to  borrow  $50,000.  They  were  authorized 
to  do  more  than  that ;  they  were  empowered  to  erect  gas  works, 
and  to  pass  ordinances  to  protect  them,  and  to  make  regula- 


Supreme  Court  of  Ohio. 

The  State  of  Ohio  rv.  The  Cincinnati  Gas  Light  and  Coke  Company. 


zo 


tions  for  the  sale  of  surplus  gas.  Here  is  full  power  and  au¬ 
thority  to  do  the  things  themselves.  Here  was  a  corporation 
instituted  by  the  state  itself,  clothed  with  this  power.  And 
right  here  let  me  notice  an  error  which  my  friend  Judge 
Gholson  has  fallen  into.  He  says  that  the  act  of  1839  granted 
the  continuing  legislative  power  to  regulate  the  sale  of  gas.  I 
beg  my  friend’s  pardon.  It  granted  the  power  to  make  regu¬ 
lations  to  dispose  of  light  to  individuals  or  corporations,  for 
the  benefit  of  the  city,  as  the  owner  of  gas  works.  It  was  not 
a  power  to  pass  ordinances  for  the  benefit  of  those  who  bought 
gas,  not  to  pass  regulations  for  the  benefit  of  individuals  and 
corporations ;  but  a  power  to  make  regulations  for  the  making 
and  sale  of  gas  light  for  the  benefit  of  the  city ,  as  the  owner  of 
the  works.  It  is  like  the  right  given  in  our  charter,  the  right 
to  manufacture  and  sell  gas ;  it  is  the  right  to  go  into  the 
business  of  supplying  itself  with  gas  and  selling  the  surplus 
gas  to  citizens  or  corporations  within  its  limits.  “  But,”  says 
Judge  Gholson,  “the  city  council  has  power  from  time  to 
time  to  pass  ordinances  for  the  protection  of  the  gas  works.” 
They  had  a  general  municipal  power  to  do  that  before,  and 
they  can  do  it  to-day.  As  an  illustration  of  the  power  of  the 
city  to  protect  the  gas  works  or  any  other  city  property,  I 
might  say  that  if  any  one  came  and  deposited  by  their  side  a 
large  quantity  of  petroleum,  or  made  a  powder  magazine  near, 
or  put  a  pile  of  lumber  so  high  that  it  would  be  endangering 
that  part  of  the  city,  in  case  of  a  fire,  there  is  no  doubt  as  to 
the  power  of  the  city  to  pass  an  ordinance  to  protect  the  gas 
works.  This  is  a  part  of  its  legislative  and  municipal  duty, 
and  it  is  only  a  repetition  of  the  power  it  had  before. 

The  city  of  Cincinnati  then  had  power  to  erect  gas  works, 
to  make  and  to  sell  gas,  when  Conover  said  to  it :  “I  propose 
to  enter  into  the  business  of  manufacturing  gas,  but  I  can  not 
do  it  economically  unless  I  have  the  easement  of  laying  the 


December  Term,  186 S. 


21 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

mains  in  the  streets  of  the  city.  Yon  have  that  property 
interest  ” — the  Court  will  notice  that  in  the  third  section  of  the 
amended  charter  of  1839  there  is  no  provision  that  the  city 
shall  enter  upon  and  dig  up  its  streets,  and  have  the  power  to 
lay  mains,  &c.  There  is  no  provision  in  the  previous  charter 
for  this,  because  it  was  not  necessary ;  it  owned  the  property 
for  that  purpose ;  all  it  wanted  was  the  power  to  engage  in 
the  manufacture  of  gas.  Now,  I  know  it  will  be  said,  as  it  always 
is  said  in  this  class  of  cases,  “  Do  you  mean  to  say  that  Cincin¬ 
nati  can  sell  its  property,  bargain  it  away,  seeing  that  it  is  a 
trust  property?”  No.  Your  Honors  will  find  in  the  law 
passed  March  11,  1845,  that  the  legislature  taking  it  for  granted 
that  the  city  of  Cincinnati  had  this  power  of  disposing  of  its 
property,  restrained  it. 

Before  that  time  it  had  unlimited  power,  only  restrained, 
as  is  recognized  in  this  act,  by  the  nature  of  the  property. 
It  could  make  no  grant  which  was  inconsistent  with  the  use 
for  which  it  held  property,  but  in  furtherance  of  the  uses 
for  which  it  held  it,  it  had  full  power  and  authority,  recognized 
by  this  act  of  the  legislature,  and  by  the  laws  of  the  land,  to 
make  any  contract.  And  it  made  this  contract  with  Conover, 
and  this  provision  with  regard  to  the  purchase,  under  the  power 
which  it  had  to  erect  gas  works.  The  principal  object  of 
the  act  of  1839  was  not  to  make  the  city  of  Cincinnati  a 
gas  company,  although  that  is  what  it  would  become  in  law  ; 
but  it  was  to  enable  it  to  supply  itself.  The  legislature, 
knowing  very  well  that  in  doing  that  it  would  have  surplus 
gas,  authorized  it  to  do  that  which  a  gas  company  would  do. 
As  to  all  the  liabilities  connected  with  property,  it  was  a 
gas  company,  and,  as  it  was  authorized  to  go  into  the  trade, 
it  was  to  have  the  benefits  that  might  be  reaped  from  it. 

Having  these  property  and  corporate  rights,  it  entered 
into  this  contract  with  Conover,  by  which  it  stipulates  to  get 


Supreme  Court  of  Ohio. 

The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 


possession  of  his  gas  works  after  a  period  of  twenty-five  years. 
It  was  a  valid,  binding,  legal  contract.  Is  it  possible  now, 
when  for  twenty-eight  years  this  contract  has  been  lived  up  to 
by  both  parties,  when  there  is  no  claim  that  Conover  and  his 
successors  have  not  performed  every  stipulation,  and  the  city 
of  Cincinnati  has  had  the  benefit  of  it,  is  it  to  be  questioned 
at  this  day,  whether  there  was  power  in  the  city  to  make  it  ? 
Courts  do  not  by  legal  subtlety  seek  to  find  reasons  why 
contracts  should  be  set  aside,  especially  when  honestly  made 
and  there  is  no  fraud,  and  nothing  of  the  sort  is  alleged  here. 
This  rule  is,  and  I  am  glad  to  say,  in  the  Supreme  Court  of 
Ohio  has  always  been  recognized. 

Your  Honors  will  recollect  at  once  that  I  refer  to  the  case 
of  the  Chillicothe  Bank,  against  the  city  of  Chillicothe,  in 
which  the  city  was  seeking  to  get  rid  of  the  obligation  to  pay 
the  money  borrowed  of  the  bank,  where  it  was  endeavored  to 
be  set  up  that  these  charter  rights  must  be  strictly  construed,  that 
we  must  give  corporations  no  other  powers  than  were  granted, 
or  necessarily  implied  ;  but,  said  Judge  Hitchcock,  when  they 
are  seeking  to  get  powers  as  against  the  public,  when  they  are 
trespassing  upon  other  men’s  rights,  that  is  so,  but  when  it 
comes  to  the  law  of  contracts,  a  different  rule  is  made  to  apply. 
When  they  are  seeking  to  get  rid  of  the  obligation  of  a  con¬ 
tract,  no  such  rule  is  to  be  applied. 

The  rule  in  modern  times  is  well  stated  by  Baron  Parke 
in  the  case  of  the  South  Yorkshire  Railroad  Company  v.  The 
Great  Northern  Railroad  Company.  In  that  case  these  two 
companies  had  entered  into  a  contract,  and  one  of  the  compa¬ 
nies  was  seeking  to  get  rid  of  its  obligations  because  it  was 
said  it  was  ultra  vires ,  and  it  was  a  very  close  question.  Three 
of  the  judges  were  one  way  and  two  the  other;  Baron  Parke 
delivered  the  opinion  of  the  majority,  the  Chief  Baron  and 
Baron  Martin  dissenting.  But,  as  I  will  show  your  Honors  in 


December  Term,  1868. 


°23 


The  State  of  Ohio  •v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

a  subsequent  case  Baron  Martin  assented  to  and  was  satisfied 
with  the  principle  upon  which  Baron  Parke  decided.  In  the 
case  of  Bateman  v.  The  Mayor  of  Ashton  (3  Hurlstone  &  Nor¬ 
man,  pp.  335-6-7,  side  paging),  he  alludes  to  what  Baron  Parke 
— Lord  W ensleydale,  as  he  had  then  become — said  :  “  I  think 
the  law  on  this  subject  is  correctly  laid  down  by  Lord  Wensley- 
dale  in  his  judgment  in  the  South  Yorkshire  Railroad  Company 
v.  The  Great  Northern  Railway  Company  (9th  Exch.  p.  84),  and 
by  Mr.  Justice  Erie  in  the  Mayor  of  Norwich  v.  The  Norfolk 
Railway  Company ,  E.  B.  418  (E.  C.  L.  R.  vol.  82).” 

It  is  to  the  effect  that,  generally  speaking,  corporations 
are  bound  by  their  contracts  as  much  as  individuals  ;  and 
where  the  seal  is  affixed  on  the  contract  made  by  the  corpora¬ 
tions  in  a  manner  binding  upon  them,  the  contract  is  the  con¬ 
tract  of  the  corporation,  to  be  governed  by  the  same  rules  of 
law  as  contracts  of  private  persons.  But  where  the  corporation 
is  created  by  an  act  of  Parliament  fortparticular  purposes  with 
special  powers,  another  question  arises,  and  the  contract  does 
not  bind  them,  if  it  appears  by  the  express  provisions  of  the 
statute  creating  the  corporation,  or  by  necessary  and  reasona¬ 
ble  inferences  from  its  enactment,  that  the  contract  was  ultra 
vires — that  is,  that  the  legislature^ meant  that  such  a  contract 
should  not  be  made.” 

The  question,  Lord  Wensleydale'  says  (9th  Exch.  85), 
appears  to  be  this  :  “  Whether  it  can  be  reasonably  made  out 
from  the  statute  that  the  contract  is  ultra  vires ,  in  other  words, 
forbidden  to  be  entered  into.”  And  in  another  part  of  his 
judgment  (p.  88),  he  states  that  “  it  not  being  made  out  that 
the  act  prohibits  the  contract,  it  must  be  enforced.”  Mr. 
Justice  Erie  adopts  the  same  view  of  the  law.  Whenever  a 
party  seeks  to  get  rid  of  a  contract,  the  question  is,  has  the 
party  been  able  to  make  out  that  the  law  prohibits  the  contract  ? 
He  says,  upon  the  next  page,  “  The  cases  in  equity  which  are 


Supreme  Court  of  Ohio. 


H 

The  State  of  Ohio  <v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

cited  were  cases  between  the  companies  and  their  shareholders, 
where  the  question  is  very  different  from  that  between  a  third 
person  and  a  company,  being  a  corporation,  upon  a  bona  fide 
contract.” 

Now,  I  say  that  is  the  very  doctrine  of  the  Supreme  Court 
of  Ohio,  laid  down  as  far  back  as  7th  Ohio  Rep.,  by  Judge 
Hitchcock,  and  affirmed  in  this  Court  in  the  case  of  Strauss  v. 
The  Eagle  Insurance  Company ,  5th  0.  S.  Rep.,  59,  decided  by 
Judge  Ranney.  That  is  the  case  where  the  insurance  com¬ 
pany  had  taken  a  note  and  discounted  it  for  the  purpose  of 
preventing  the  plaintiff  from  getting  his  insurance — the  com¬ 
pany  having  it  as  an  offset.  The  Court  held  that  that  was  not 
valid,  hut  they  laid  down  the  general  principles  as  laid  down 
in  the  case  in  9  Exch.  Rep. 

Your  Honors  will  see  that  it  was  the  intention  of  the 
legislature  that  the  city  should  use  the  necessary  means. 

The  power  granted  was  to  cause  the  city  to  be  lighted,  to 
make  and  dispose  of  gas  light,  and  under  that  the  city  council 
had  the  power  to  make  the  contract  with  Conover  for  the  pur¬ 
chase  of  his  works,  stipulating,  in  the  meantime,  for  what  was 
the  principal  thing,  gas  for  the  city,  just  as  they  should  require 
it  and  no  faster.  I  take  it  then,  that  this  was  a  valid  and 
binding  contract,  and  that  it  gave  to  Mr.  Conover  a  property 
interest.  I  think  the  whole  trouble  in  this  case  has  grown  up 
by  giving  that  which  is  only  an  easement  a  new  and  different 
name,  and  calling  it  a  franchise — dignifying  it  with  the  name 
of  a  franchise. 

If  your  Honors  please,  in  19th  English  Law  and  Equity 
Reports,  neither  the  Attorney  General,  nor  the  learned  counsel 
engaged  in  that  case,  nor  that  eminent  jurist,  Lord  Cran worth, 
nor  the  Lord  Justices,  for  a  moment  believed  or  said,  nor  did 
it  seem  to  enter  their  minds,  that  that  which  the  new  company 


December  Term,  1868. 

The  State  of  Ohio  -v.  The  Cincinnati  Gas  Light  and  Coke  Company. 


25 


was  doing,  and  for  which  the  attorney  general  was  suing,  was 
the  exercise  of  a  franchise. 

The  plaintiff  company  had  a  franchise,  if  any  body  had, 
but  they  did  not  speak  of  it  as  a  franchise.  They  had  express 
power  in  the  charter  to  dig  up  the  streets,  but  they  considered 
it  as  an  easement.  Your  Honors  are  aware  that  a  franchise  in 
England  is  derived  from  the  Crown.  Here  was  a  plaintiff  com¬ 
pany  that  had  become  a  corporation  by  act  of  Parliament,  and 
if  ever  there  was  a  franchise,  the  plaintiff’  company  in  that 
case  had  a  franchise.  If  ever  there  was  a  case  for  finding  a 
remedy — if  there  ever  was  a  case  for  an  information  in  the 
nature  of  a  quo  warranto ,  instead  of  in  Chancery — that  was  the 
very  case.  It  was  not  pretended  that  the  joint  stock  company, 
which  was  not  a  corporation,  had  any  grant  or  privilege  from 
the  Crown  or  Parliament,  and  nobody  suggested  that  they  were 
exercising  a  franchise. 

And  now  I  put  it  to  the  Court  if  there  is  any  franchise  in 
the  case.  Is  it  not  a  misconception  of  the  gentlemen  ?  They  have 
called  it  such.  I  know  Judge  Gholson  is  ready  to  refer  me  to 
our  own  plea.  But  we  can  not,  by  giving  it  a  name,  change 
its  character.  We  can  not  make  that  which  is  an  easement  a 
franchise  by  calling  it  such,  nor  can  the  Attorney  General.  He 
has  called  it  a  franchise,  and  we  have  pleaded  that  we  have 
certain  liberties,  rights,  and  privileges  that  are  granted  by  the 
charter  and  Conover  contract.  We  have  not  said  what  the 
character  of  those  privileges  may  be.  Certainly  we  have  cer¬ 
tain  franchises,  one  of  which  they  are  endeavoring  to  take 
away — that  of  being  a  corporation.  But  I  venture  to  say,  we 
get  nothing  else  that  is  a  franchise,  nor  are  we  estopped,  in  this 
proceeding,  to  question  whether  this  right  to  lay  pipe  is  a  fran¬ 
chise — whether  that  which  the  Attorney  General  is  complaining 
of,  is  a  franchise  in  law.  Assuredly,  the  power  to  manufac¬ 
ture  and  sell  gas  is  no  franchise. 


Supreme  Court  of  Ohio. 


26 

The  State  of  Ohio  rv.  The  Cincinnati  Gas  Light  and  Coke  Company. 

What  was  the  case  in  2d  Strange’s  Reports  ?  The  defend¬ 
ant  was  carrying  passengers  across  a  river — I  think,  a  navigable 
river — but  he  was  not  usurping  the  franchise  of  taking  toll ;  he 
was  doing  the  work  of  ferrying,  and  he  took  passage  money; 
but  he  did  not  take  it  as  toll — he  took  it  as  hire.  And  in  the  case 
of  Rex  v.  Marsden ,  there  were  two  towns  near  by,  one  having 
a  market,  the  other  not ;  and  a  man  having  property  in  the 
town  that  had  no  market,  permitted  persons  to  gather  just  as 
they  did  at  the  market ;  and  they  sought  an  information  against 
him,  to  know  by  what  warrant  he  claimed  to  set  up  a  market. 
It  appeared  that  all  he  did  was  to  permit  parties  to  come  there 
and  occupy  stalls,  and  that  he  took  stallage  from  them  ;  and 
the  information  was  refused. 

In  the  case  of  a  ferry,  what  is  the  franchise  ?  A  ferry 
is  not  granted  necessarily  on  the  highway,  or  to  the  adjacent 
land  holder ;  nor  does  the  franchise  of  a  ferry  consist  in  own¬ 
ing  the  land  or  having  an  easement  in  the  land.  It  consists 
in  the  right  of  taking  toll  for  carrying  passengers.  As  it  was  one 
of  the  king’s  duties  to  provide  highways,  and  ferries,  and 
bridges,  and  markets,  no  one  could  set  up  and  do  these  things 
without  a  grant  from  the  Crown.  Yet  a  man  might  build  a 
free  bridge  on  his  own  land,  and  permit  parties  to  pass  and 
repass  ;  but  he  had  no  right  to  set  up  a  bridge,  and  claim  toll, 
and  exercise  the  right  of  taking  toll.  And  so,  in  the  rail¬ 
way  case  Judge  Oholson  decided  in  10th  O.  S.  Rep.  What  is 
it  that  has  now  become  a  franchise  ?  The  right  to  operate  or 
run  and  take  toll  on  a  line  of  railway. 

Now,  that  it  may  be  competent  for  the  legislature  of 
Ohio  to  make  certain  businesses  franchises  (as  it  is  said  in  15 
Johns.  Rep.  was  done)  by  an  act  prohibiting  parties,  without 
a  grant,  from  entering  into  the  business,  is  probable. 

The  case  in  15  Johns.  Rep.  was  this  :  The  Utica  Insu¬ 
rance  Company  engaged  in  the  business  of  banking,  and  the 


December  Term,  1868 . 


27 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company; 

Attorney  General  attempted  to  enjoin  them  from  the  exercise 
of  the  power.  But  the  Chancellor  said,  “  No ;  your  remedy  is 
by  information  in  the  nature  of  a  quo  warranto  .”  When  he 
brought  the  information,  it  was  said  :  “  This  is  not  a  franchise/’ 
“That  was  very  true,”  replied  the  Court,  “  until  the  prohibitory 
act  was  passed,  which  prohibited  corporations  or  associations 
of  individuals  from  engaging  in  the  business  of  banking,  but 
that  made  it  a  franchise.”  Justice  Spencer,  in  that  case,  gives 
the  best  definition  of  a  franchise :  “  It  is  a  privilege  or  immu¬ 

nity,  of  a  public  nature,  which  can  not  be  legally  exercised 
without  legislative  grant.”  He  has,  immediately  preceding 
this,  specified  the  cases  where  the  king  had  the  prerogative , 
and  that  is  what  he  means  by  “  public  nature.”  But  my  learned 
friends  will  say  :  Here,  in  the  second  section  of  your  charter, 
is  a  franchise. 

This  company  had  power,  without  any  other  provision 
than  that  contained  in  the  first  section,  creating  it  a  corporation 
and  authorizing  it  to  make  contracts,  to  acquire  property 
rights.  Let  us  look  at  the  second  section.  “  The  corporation 
hereby  created  shall  have  full  power  to  manufacture  and  sell 
gas.”  That  is  not  a  franchise.  It  is  a  limitation  upon  the  first 
section,  as  to  the  nature  of  the  business  in  which  the  company 
can  engage,  showing  to  what  it  is  restricted. 

The  section  incorporates  the  Cincinnati  Gas  Light  and 
Coke  Company,  giving  it  general  powers.  The  second  section 
must  be  read  as  a  continuation  of  the  first  section.  First, 
giving  the  company  the  right  to  manufacture  and  sell  gas ;  then 
giving  it  the  power  of  acquiring  an  easement  in  the  streets,  for 
laying  pipe,  with  the  consent  of  the  city  council ;  and  that  is 
all  that  there  is  of  it,  except  that  it  goes  on  and  restricts  it  as 
to  the  amount  of  its  property.  When  the  city  of  Cincinnati 
consented  to  the  assignment  of  the  contract  which  had  made 


28 


Supreme  Court  of  Ohio . 


The  State  of  Ohio  -v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

with  Conover,  it  consented  that  this  company  should  acquire 
a  property  interest  in  the  streets,  known  in  law  as  an  easement 

It  is  said  that  this  is  a  franchise,  like  the  taking  of  toll, 
and  that  it  has  been  decided  that  the  legislature  may  restrict 
the  amount  of  tolls,  unless  there  is  something  in  the  grant  to 
prevent  it.  I  beg  leave  to  say  that  I  do  not  see  that  we  are 
taking  toll.  We  are  not  engaged  conveying  gas  for  third 
parties.  We  are  not  laying  pipes  and  taking  toll  for  carrying 
gas.  We  are  not  bound  to  sell  it,  and  nobody  is  bound  to 
buy  it.  If  we  were,  we  would  not  be  selling  gas.  W e  would 
be  supplying  gas,  under  regulations  made  by  a  superior  power. 
And  this  is  no  monopoly. 

Gas  comes  into  competition  with  everything  possessing 
illuminating  power.  What  appears  upon  this  record  ?  That 
there  are,  in  the  city  of  Cincinnati,  but  ten  thousand  gas  con¬ 
sumers.  Gas  is  not  an  absolutely  necessary  article,  when  so 
many  substances  can  be  used  for  illumination — candles,  oils  of 
various  kinds,  and  anything  that  may  be  discovered  hereafter. 
Why,  this  very  printed  record,  and  this  printed  brief,  now  be¬ 
fore  your  Honors,  was  set  up  and  printed  in  an  establishment? 
in  the  very  heart  of  Cincinnati,  one  of  the  largest  printing 
establishments  in  Cincinnati,  where  the  gas,  differing  in  no 
material  respect  from  that  used  in  this  room,  is,  and  has  been 
for  the  past  fifteen  years,  made  in  that  establishment. 

The  gas  manufacturing  apparatus  is  not  much  larger 
than  an  ordinary  stove,  the  gas  being  made,  I  believe,  out  of 
sawdust  and  crude  petroleum.  How,  we  do  not  claim  that  there 
is  anything  to  prevent,  this  person  from  supplying  gas  to  his 
neighbors*  He  might  supply  that  large  public  hall  (the  Melo- 
deon)  immediately  adjoining,  or,  possibly,  those  magnificent 
stores  on  Fourth  street,  between  Walnut  and  Vine  streets. 
There  is  nothing  in  this  contract  that  prevents  an  individual, 
or  an  association  of  individuals,  living  in  the  same  square,  from 


December  Term,  1868. 


29 


The  State  of  Ohio  i>.  The  Cincinnati  Gas  Light  and  Coke  Company. 

owning  and  operating  small  gas  works  of  their  own.  There 
is  nothing  in  this  contract  preventing  parties  doing  that,  if 
they  choose ;  and  there  is  nothing  that  binds  ns  to  supply 
them. 

Under  the  circumstances,  gas  must  be  considered  a  lux¬ 
ury  rather  than  a  necessary  of  life ;  and  because  it  is  such,  and 
because  the  interest  of  this  party,  like  the  interest  of  any  other 
manufacturing  corporation — like  the  one  it  is  likened  to  in  the 
25th  Conn.,  a  leather  manufacturing  company — is  to  sell  its 
commodity,  the  state  leaves  it  to  that  interest  as  it  would  any 
other  manufacturer. 

This  company,  then,  having  the  power  to  acquire  this 
species  of  property,  by  the  assignment  of  Conover,  with  the 
consent  of  the  city  of  Cincinnati,  acquired  this  easement ;  and 
no  alteration  or  amendment  of  its  charter  can  take  that  away 
or  diminish  its  value.  That  it  is  not  a  franchise  is  apparent 
from  the  proposition  that  no  alteration  or  amendment  to  the 
charter,  although  the  power  is  reserved,  can  affect  its  property 
rights,  or  add  conditions  upon  which  it  can  exercise  them. 

To  what  Judge  Hoadly  said  in  regard  to  fixing  the  price 
of  gas,  I  want  to  add  this  consideration.  It  is  a  general 
proposition  that  a  company,  like  an  individual,  has  the  same 
right  to  sell  and  dispose  of  the  property  which  it  has  a  right 
to  acquire,  that  an  individual  has,  and  that  property  rights 
can  not  be  interfered  with.  And  I  put  this  question  to  my 
learned  friends :  If  the  city  of  Cincinnati  can  fix  the  price  at 
which  we  shall  sell  gas  that  we  manufacture,  why  can  not  the 
city  of  Cincinnati  fix  the  price  of  coke  ?  Why  can  it  not  fix 
the  price  of  coal  tar,  the  product  of  the  residuum,  or  that  which 
is  used  as  a  fertilizer,  the  refuse  lime,  or  any  other  production  ? 
There  is  no  difference.  We  have  the  right  to  manufacture  and 
sell  gas ;  it  is  not  said  we  have  the  right  to  sell  coke. 

If  we  have  a  franchise  at  all,  we  have  a  franchise  just  as 


80 


Suprejne  Court  of  Ohio. 

The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 


much  in  selling  coke,  and  coal  tar,  and  the  lime,  as  in  selling 
gas.  We  have  the  same  property  right  in  each ;  and  why  the 
city  of  Cincinnati  is  restricted  in  the  one  case,  and  not  in  the 
other,  passes  my  comprehension. 

But  it  seems  to  me  that  this  whole  trouble  has  grown 
out  of  calling  the  right  to  lay  pipes  by  a  name  which  does  not 
belong  to  it — calling  it  a  franchise,  when  it  is  nothing  but  an 
easement,  and  endeavoring  to  tack  upon  that  the  right  to  reg¬ 
ulate  the  price  of  a  commercial  commodity,  when  there  is  no 
more  reason  than  there  would  be  in  fixing  the  price  of  leather 
manufactured  by  a  company,  or  fixing  the  price  of  coke  or 
coal  tar ;  and  if  such  a  right  exists  by  reason  of  this  charter, 
if  it  exists  in  one  case,  why  does  it  not  exist  in  the  other  ? 

We  come  now  to  the  statutes  of  1853  and  1854.  The  lan¬ 
guage  of  the  statute  of  1853  is  broad  enough  to  give  to  the  city 
of  Cincinnati  the  power  to  fix  the  price  of  gas  manufactured 
by  the  defendant,  because  it  includes  all  companies  in  its  gen¬ 
eral  language.  But,  as  Judge  Swan  says,  it  is  not  to  be  sup¬ 
posed  that  the  legislature  intended  that  it  should  apply  to 
companies  incorporated  before,  without  some  special  provision 
in  their  charter;  and  the  legislature,  having  discovered  that 
there  were  cases  not  covered  by  the  act,  made  haste  to  repair 
the  omission;  and  that  is  the  object  of  the  law  of  1854. 
Hence,  the  act  of  1854  is  a  supplemental  act  to  that  of  1853, 
and  supersedes  it  as  to  all  property  situated  like  that  of  the 
defendant. 

Now,  if  your  Honors  will  permit,  I  will  restate  the 
argument:  That  the  charter  gave  no  power  to  the  legislature 
of  Ohio  to  delegate  its  power  of  amendment  or  modification. 
It  is  a  very  high  power  that  can  change  the  terms  of  a  con¬ 
tract.  Suppose  the  Mayor,  in  the  act  of  1854,  had  been  given 
the  power  to  fix  the  price  of  gas,  would  that  be  within  the 
terms  of  the  contract  ?  By  the  reservation,  one  of  the  parties 


December  Term,  1868. 


31 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

has  the  right  to  modify  within  certain  limits ;  but  it  was  a 
reservation  personal  to  the  legislature,  and  not  a  reservation  to 
the  effect  that  the  legislature  may  delegate  to  some  one  else  to 
alter  and  modify.  The  reservation  is  that  the  legislature  shall 
do  it ;  and  your  Honors  know  that  in  the  legislature  there  is  a 
time  appointed  for  hearing  before  a  body  of  men  selected  from 
all  parts  of  the  state. 

It  is  true  that  under  the  new  constitution,  the  legis- 
ture  has  no  power  to  confer  corporate  powers  by  special  act, 
but  it  may  modify,  repeal,  or  amend  ;  there  is  no  prohibition 
as  to  that,  just  as  long  as  it  is  acting  under  the  power  it  has 
reserved.  It  shall  not  enlarge  them,  but  the  constitution  has 
not  forbidden  it  to  exercise  the  power  it  reserved  in  this  case. 
There  is  no  necessity  for  its  delegation.  And  there  is  a  con¬ 
tract  between  the  parties  that  it  shall  not  be  delegated,  for  if 
they  intended  that  such  should  be  the  power  they  would  have 
expressed  it,  and  if  they  failed  to  express  it  in  the  contract,  it 
it  does  not  exist. 

I  am  reminded  by  Judge  Hoadly  that  in  none  of  the 
cases  where  legislatures  have  attempted  to  exercise  this  power  of 
amendment  under  general  laws,  was  there  a  constitutional  pro¬ 
vision  like  that  in  our  constitution  in  regard  to  the  amendment 
of  acts;  but  whether  there  was  or  not,  I  submit  that  here  is  a 
body  with  continued  existence  able  to  modify  the  contract,  it 
there  is  such  a  power  reserved,  by  an  act  directly  on  the  sub¬ 
ject  matter.  There  is  no  defect  in  the  body,,  and  it  is  to  it 
that  is  reserved  the  power  to  alter  or  amend,  and  only  by  it  can 
it  be  exercised,  for  that  is  what  the  parties  have  stipulated 
and  nominated  in  the  bond.  If  it  were  a  case  between  indi¬ 
viduals  there  would  not  be  a  question  about  it. 

If  A.  B.  and  C.  D.  had  agreed  that  0.  D.  should  have 
the  power  to  modify  a  contract  in  certain  particulars,  C.  D. 
could  not  delegate  his  power  to  somebody  else  to  do  it.  It  is 


32 


Supreme  Court  of  Ohio. 


The  State  of  Ohio  v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

personal  to  him,  unless  he  has  reserved  the  power  to  delegate 
the  right.  This  is  a  contract,  say  the  Supreme  Court  of  the 
United  States,  in  the  Binghamton  bridge  case,  and  it  is  to  be 
construed  by  the  same  rules  that  you  construe  contracts  be¬ 
tween  individuals.  How,  it  is  time  enough  to  say  that  this  is 
an  amendment  to  the  charter  of  the  Cincinnati  Gas  Light  and 
Coke  company,  when  the  legislature  of  Ohio,  which  has  re¬ 
served  the  power,  has  acted  upon  the  subject.  But  I  think  it 
was  not  intended  to  be  acted  upon. 

I  think  it  is  plain  enough  when  you  read  the  act  of  1853, 
and  read  the  note  by  so  able  a  lawyer  and  judge  as  Judge 
Swan  on  that  section  of  the  act  of  1853,  and  then  read  the  act 
of  1854,  what  the  legislature  meant  by  the  act  of  1854.  It 
took  the  facts  as  it  found  them  :  that  here  was  a  city  in  the 
state  of  Ohio  that  had  entered  into  a  contract  with  a  gas  com¬ 
pany,  by  the  terms  of  which  it  had  provided  for  its  own  gas, 
both  for  the  public  streets  and  public  buildings,  but  not  for 
gas  supplied  to  its  citizens.  Read  the  act  of  1854  ;  it  includes 
both  gas  supplied  to  the  citizens  and  gas  supplied  to  the  city, 
and  it  says  as  to  both  :  You  may  pass  an  ordinance  fixing  a 
minimum  price  wdiich  shall  be  in  force  for  a  period  of  ten 
years ;  and  when  it  is  accepted  by  the  company  you  shall  not 
require  them  to  sell  gas  at  a  less  price,  and  the  acceptance 
shall  be  in  writing.  Yow,  your  Honors  may  suppose  that  the 
period  might  not  be  ten  years,  it  might  be  only  one  year ;  and 
then  comes  the  proviso,  provided  that  this  contract  shall  not 
interfere  with  any  contract  made  with  the  Cincinnati  Gas  Light 
and  Coke  company. 

You  may  inject,  as  it  were,  a  temporary  contract  into 
this,  not  only  as  to  your  own  gas,  for  which  you  have  already 
agreed,  but  as  to  the  gas  for  your  private  consumers,  as  to 
which  you  have  not  agreed;  and  that  shall  not  affect  the 
original  contract  after  the  termination  of  the  ordinance.  That 


December  Term,  1868.  33 

The  State  of  Ohio  'v.  The  Cincinnati  Gas  Light  and  Coke  Company. 

is  the  sum  and  substance  of  the  law ;  that  is  its  intention  as  I 
read  it,  and  read  in  that  light,  it  seems  to  me  it  is  consistent. 
When  the  ordinance  is  agreed  to  by  the  company  is  the  time 
when  it  becomes  binding. 

Where  would  be  the  necessity  of  providing  that  the  city 
council  should  fix  a  minimum  price,  if  the  company  had  noth¬ 
ing  to  do  with  it — a  price  below  which  the  company  could  not 
but  above  which  it  might  go  ?  If  the  city  council  can  fix 
the  maximum  without  the  consent  of  the  company,  that  was 
already  provided  for  in  the  act  of  1853,  and  the  act  of  1854  was 
not  needed.  There  is  no  act  that  binds,  and  there  was  no 
intention  to  bind  the  company  to  supply  gas  at  the  price  fixed, 
whether  it  wished  to  or  not.  If  it  see  fit  to  supply  it  to  the 
citizens  for  less  money,  to  increase  its  custom,  is  there  any  law 
to  prevent  it  ? 

The  act  of  1854  fixes  the  minimum  price.  It  says, 
“  That  after  the  passage  of  this  law,  it  shall  be  lawful  for  the 
city  council  of  any  city  in  which  a  gas  company  has  been,  or 
may  be  hereafter  established,  to  fix,  from  time  to  time,  by  ordi¬ 
nance,  the  minimum  price  at  which  such  council  shall  require 
such  company  to  furnish  gas  to  the  citizens,  or  public  buildings 
of  such  city,  or  for  the  purpose  of  lighting  the  alleys  and  pub¬ 
lic  grounds  thereof,  for  any  period  not  exceeding  ten  years,  and 
from,  and  after  the  assent  of  said  company  to  such  ordinance ,  by  a 
written  acceptance  thereof,  filed  in  the  clerk’s  office  of  such 
city,  it  shall  not  be  lawful  for  said  city  council  to  require  said 
company  to  furnish  gas  to  the  citizens,  public  buildings,  etc., 
at  a.  less  price  during  the  period  agreed  on,  not  exceeding  ten 
years,  as  aforesaid. 

Now,  the  ordinance  of  the  city  council,  right  in  the  teeth 
of  the  act  of  1854,  and  the  Conover  contract,  says  that  the 
Cincinnati  Gas  Light  and  Coke  company  shall  furnish  gas  of  a 
standard  quality  to  the  public  buildings,  etc.,  at  the  rate  of 


34 


Supreme  Court  of  Ohio. 


The  State  of  Ohio  -v.  The  Cincinnati  Gas  Light  and  Co>ce  Company. 

two  dollars  per  thousand  cubic  feet,  and  shall  not  charge  any 
greater  sum.  Judge  Matthews  admits  that  the  Conover  con¬ 
tract  is  a  valid  contract. 

Judge  Matthews — I  never  have  done  so. 

Mr.  Ferguson — Whether  Judge  Matthews  admits  it  or 
not,  the  law,  as  it  stands,  will  not  interfere  with  the  contract 
between  the  gas  company  and  the  city  council. 

This  ordinance  says  we  must  furnish  gas  to  the  public 
buildings ,  and  we  must  at  the  same  price  furnish  it  to  private 
consumers.  This  is  a  violation  of  the  contract.  It  was  not 
intended  that  the  city  council  should  have  any  such  right. 
The  object  of  the  law7  was  to  uphold  and  maintain  contracts, 
and  to  keep  the  good  faith  of  the  city,  and  there  is  nothing  in 
it  in  conflict  with  the  contract  between  the  parties.  No  pro¬ 
vision  was  made  in  the  original  contract  for  gas  sold  to  private 
consumers,  but  it  might  be  that  the  parties  might  wish  to  mod¬ 
ify  it  on  behalf  of  the  citizens.  The  legislature  says,  “We 
will  enable  the  city  council  to  do  that.  The  company  has  the 
corporate  power  to  contract  on  its  own  behalf,  it  requires  no 
enabling  act ;  and  you  may  contract  on  behalf  of  your  citizens  ; 
you  have  no  such  power  now,  but  we  will  enable  you  to  do  it 
by  the  passage  of  this  law  of  1854,  under  which  you  and  the 
company  may  agree  for  a  period  of  ten  y7ears.” 

Now,  it  seems  to  me  that  this  is  the  plain  common  sense 
of  this  case,  looked  at  in  the  light  in  which  the  contract  was 
made,  and  has  been  executed  and  understood  by  the  parties  for 
twenty-eight  years.  What  a  strange,  inconsistent  case  this  is, 
looking  at  the  very  last  provision  of  this  ordinance,  “  provided, 
however,  that  nothing  herein  is  to  be  construed  as  a  waiver  by 
the  city  of  its  right  to  obtain  possession  of  the  works  of  said 
company,  as  provided  by  contract  therewith.” 

What  contract?  The  contract  which  my  friend,  Judge 
Matthews,  proposes  to  repudiate,  at  this  late  day,  as  in- 


December  Term,  1868. 


35 


The  State  of  Ohio  rv.  The  Cincinnati  Gas  Light  and  Coke  Company. 

valid,  and  not  binding,  and  as  ultra  vires ,  beyond  the  power 
of  the  city  to  make.  It  may  be  that  the  city,  like  the  state, 
can  have  inconsistent  claims  upon  the  same  record.  The 
state  of  Ohio  does,  in  this  case,  make  inconsistent  claims  in 
pleading,  first  in  order,  that  we  are  no  corporation,  and  then  in 
charging  that  we  usurp  certain  privileges  as  a  corporation  ;  and 
now  we  have  the  inconsistency  of  its  being  claimed  that  the 
contract  is  valid  and  invalid  at  the  same  time. 

I  have  only  to  add  that  I  respectfully  request  a  recon¬ 
sideration  of  the  question  whether  or  not  the  plea  of  the  judg¬ 
ment  in  the  District  Court  is  not  a  bar  to  the  exercise  of  this 
power.  There  is  no  reason,  that  I  can  see,  why  the  state  should 
not  be  barred  the  same  as  an  individual,  as  to  the  question  in 
that  case,  namely  :  whether  the  city  of  Cincinnati  had  the  right 
to  fix  the  rate  at  which  gas  should  be  supplied  to  its  citizens. 

Thanking  the  Court  for  the  patience  with  which  they 
have  listened  to  me,  I  submit  the  case. 


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